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Veríssimo, P., Carvalho, P. V. & Laureano, L. (2021). Asymmetries in the Euro area banking profitability. The Journal of Economic Asymmetries. 24

P. Veríssimo et al.,  "Asymmetries in the Euro area banking profitability", in The Journal of Economic Asymmetries, vol. 24, 2021

@article{veríssimo2021_1732197422520,
	author = "Veríssimo, P. and Carvalho, P. V. and Laureano, L.",
	title = "Asymmetries in the Euro area banking profitability",
	journal = "The Journal of Economic Asymmetries",
	year = "2021",
	volume = "24",
	number = "",
	doi = "10.1016/j.jeca.2021.e00224",
	url = "https://www.sciencedirect.com/journal/the-journal-of-economic-asymmetries"
}

TY  - JOUR
TI  - Asymmetries in the Euro area banking profitability
T2  - The Journal of Economic Asymmetries
VL  - 24
AU  - Veríssimo, P.
AU  - Carvalho, P. V.
AU  - Laureano, L.
PY  - 2021
SN  - 1703-4949
DO  - 10.1016/j.jeca.2021.e00224
UR  - https://www.sciencedirect.com/journal/the-journal-of-economic-asymmetries
AB  - This paper shows how bank-specific, industry-specific, and macroeconomic determinants affect
the profitability of 3046 banks across 19 Euro area countries, from 2006 to 2015. To assess the
existence of potentially relevant asymmetries, we split our sample of Euro area banks into peripheral
and core countries’ banks. Our results reveal that, compared to banks from core countries,
the marginal effect of the loan loss provisions burden on profitability is, on average, at least
3 times larger in peripheral banks where a 1 p.p. increase in loan loss provisions reduces return on
average assets by 0.6 p.p. Moreover, the impact of loan loss provisions on profitability levels
during the 2008–2013 financial crisis period is found to be significantly more severe in peripheral
banks. Our results likewise suggest that the improvement of efficiency levels and a more selective
asset growth have stronger effects on the returns of peripheral banks. In contrast, the effect of
customer deposits suggests that core countries’ banks make better use of this source of funding.
ER  -